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In addition, purchasing of land, or purchasing of agricultural tools, storage of produce and transport, cost of ploughing land for sowing, weeding, and transplantation also are included under purview of agricultural loans.
Farmers can avail an agricultural loan starting at 7% p.a. and with processing fee ranging between zero to 4% of the loan amount.
Agricultural Loan Providers
Interest rate | 7% p.a. onwards |
Processing fee | 0% to 4% of the loan amount |
Bank | Interest Rate | Processing Fee |
State Bank of India | 7.25% p.a. onwards | 0% p.a. to 1.25% p.a. of the loan amount |
ICICI Bank | 9.6% p.a. onwards | 0.5% p.a. to 4% p.a. of the loan amount |
IDBI Bank | 7% p.a. onwards | At the discretion of the bank |
IndusInd Bank | 10% p.a. onwards | 1.25% of the loan amount + GST |
Central Bank of India | Up to 13.25% p.a. | At the discretion of the bank |
Karur Vysya Bank | 8.30% p.a. onwards | At the discretion of the bank |
Given below is the list of types of agriculture loans that you can avail for yourself:Â
Other types of loansÂ
Name of the bank | Agriculture loan schemes offered |
State Bank of India |
|
National Bank for Agriculture and Rural Development (NABARD)Â |
|
Karur Vysya Bank |
|
ICICI Bank |
|
IndusInd Bank |
|
If you are looking to apply for an agriculture loan, it is advisable to research your options online and apply for a loan of your choice by visiting the nearest branch of a lender. When visiting the branch, ensure that you carry the required documentation along with you to quicken the application process.
Certain lenders may also give prospective borrowers the option to apply for an agriculture loan online through their official websites. In this case, you will need to navigate to the respective website, click on ‘Apply Now’, enter the required details in the application form, and upload the necessary documents onto the website.
Regardless of the channel that you choose, the lender will verify your application and approve it. Once your application gets approved, the loan amount will be disbursed into your account.
A number of lenders today, offer a range of agriculture loans for the benefit of their customers. The various purposes for which you can avail an agriculture loan are as follows:
The key features and benefits of agriculture loans are as follows:
The documents that you may be asked to submit at the time of applying for an agriculture loan are as follows:
The eligibility criteria to borrow an agriculture loan will vary based on the type of loan scheme that you opt for. The generalised eligibility criteria, however, are as follows:
Yes, banks do extend loans to farmers for purchasing lands. However, banks usually finance purchase of land within a radius of 3 to 5 Kms of their residence or within village boundary.
Most lenders will allow you to prepay the outstanding loan balance and pre-close the loan amount before the completion of the loan tenure. However, you may need to pay a pre-closure penalty to the lender.
The key stages involved in the process of availing an agriculture loan are as follows:
Submission of application form and relevant documents Lender processes the application Loan amount is sanctioned Loan amount gets disbursed into the customer’s savings account
The time required to process your application will vary based on the lender’s terms and conditions. That said, most lenders take around 7 days to process loan applications.
Yes, most lenders will require you to have a guarantor.
Yes, banks do extend loans to farmers for purchasing lands. However, banks usually finance purchase of land within a radius of 3 to 5 Kms of their residence or within village boundary.
Farmers who own less than 2.5 acres of irrigated land or 5 acres of non-irrigated land, i.e-marginal and small farmers-are eligible to buy land by availing a bank loan. Sharecroppers and tenant farmers can also be covered under the scheme.
Yes, it is possible. As per Govt policy women owning land could lead to their empowerment. Hence, purchase of land in women can be financed and preference can be given to women in distress, SHG members and widows etc.
In addition purchasing of land, or purchasing of agricultural tools, storage of produce and transport also are included under purview of agricultural loans.
To encourage institutional borrowing among farmers, banks have relaxed security or collateral for agricultural loans.
As per RBI directive, crop loans till an amount of Rs. 1 lakh require no security. Loans over Rs. 1 lakh may require security as per the lending banks terms and conditions.
Similarly, there is no margin for loans for purchase of land up to Rs 50,000 and amounts higher than this require a margin of 10%. The land is supposed to mortgaged in favour of the Bank and is considered the security.
A GST rate of 18% will be applicable on banking services and products from 01 July, 2017.
India Finance Minister Nirmala Sitharaman announced the second tranche of economic package under Prime Minister Atmanirbhar Abhiyan.
Sitharaman announced that all the farmers who had availed crop loans from banks where the due date to repay the amount was 1 March will get a relief as the Government of India has decided to extend the repayment date to 31 May 2020.
The Government also sanctioned Rs.25 crore loan for 25 Lakh new farmers with Kisan Credit Card under the economic package.
3 crore farmers with agricultural loans of up to Rs.4.22 lakh crore availed the benefit of 3 months loan moratorium.
Necessary support has already been provided by National Bank for Agriculture and Rural Development0 (NABARD) and refinanced Rs.29,500 crore to Cooperative Banks and Regional Rural Bank in March 2020.
The Government also approved 63 lakh loans worth Rs.86,000 crores approved in Agriculture during the period between 1 March 2020 and 30 April 2020.
Working Capital of Rs.67,000 crore has been sanctioned by the Government for procurement of agriculture produce to the State Governments entities since March 2020.
In the Union Budget 2020, Finance Minister Nirmala Sitharaman announced that the Agriculture credit target will be Rs.15 lakh crore. This recorded a 25% increase from the previous year’s Rs.12 lakh crore making it the highest growth target for loans for Agriculture.
However, this has received criticism from many as this increase in agricultural credit can be negative as various state governments have been announcing loan waivers for various segments. Shakti Pumps and Roto pumps are a good beneficiary for governments initiative to fund 20 lakh farmers for installing solar pumps.
The Tax on Medical Devices and the funds which are sourced from PPP mode, the government will be building more affordable hospitals under the Ayushman Bharat Scheme. These hospitals will be built in 112 districts to help treat and cure the diseases for which treatments are not always available.
Under this scheme, these hospitals will be empanelled positive for various diagnostic companies. Around 2,000 medicines will be included in the Jan Aushadhi Kendra by 2024. Apart from this, the government also proposed to expand the grid infrastructure of Natural gas to 27,000 km from 16,200 km.
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